In a major blow to rival Ticketmaster, Live Nation has signed a ticketing deal with venue operations giant SMG that calls for Live Nation to sell tickets for SMG’s North American facilities over five years.
The deal begins in 2009 when Live Nation officially launches its new ticketing operation, and it marks another disappointment for Ticketmaster, which last month lost a lucrative ticketing deal in Germany to Live Nation ticketing partner CTS Eventim. CTS is supplying Live Nation with the backbone for its ticketing operation.
When news of the deal hit the financial markets earlier today, by 10:47am, it helped raise Live Nation’s stock price (Symbol: LYV) by $1.38 per share to $17.25. By contrast at the same time, Ticketmaster’s stock price (Symbol: TKTM) was slipping by $1.82 down to $17.05. Live Nation’s market capitalization is $1.31 billion, surpassing that of Ticketmaster which is $950.49 million. (See Live Nation’s and Ticketmaster’s stock charts below)
Live Nation, the world’s largest live music company, expects to handle 25 million tickets for SMG over the life of the deal, which will generate an estimate in excess of $50 million in ticketing fees. The company and SMG, the world’s largest venue operator, are Ticketmaster’s two largest clients, which combined were responsible for close to 25 percent of Ticketmaster’s business.
“This alliance increases our expected total ticket inventory by 25 percent over the next seven years, and that’s before we even flip the switch on Live Nation Ticketing,” Nathan Hubbard, CEO of Live Nation Ticketing, said in a statement. He added that in the first year of the company’s ticketing operation Live Nation’s venues alone will generate more than 10 million tickets, not including SMG’s locations. “The fact that SMG, the world leader in venue management, has selected our new ticketing platform as its exclusive service provider validates that our unique content plus ticketing proposition delivers a double win via one single provider.”
Ticketmaster will not roll over for Live Nation without a fight. The company recently outlined its growth strategy for the future, relying heavily on international expansion and a further push into the secondary ticket market through its TicketsNowsubsidiary. In addition, Ticketmaster President and CEO Sean Moriarty told the Wall Street Journal that SMG’s municipally owned venues will require a bid process before ticketing changes can be made, but SMG countered that few of the venues it manages fall under that category.